Winter's icy grip takes hold of housing market as prices and volumes fall

The median price of homes sold throughout the country declined by 1.1% in June compared to May, according to the Real Estate Institute of NZ.

The national median selling price was $529,000 in June, down from $535,000 in May.

In Auckland the median price dropped from $857,000 in May to $850,500 in June, well down from the peak of $905,000 set in March.

However, prices in Auckland may be sliding more than those figures suggest, with the REINZ’s House Price Index showing Auckland prices have now fallen below where they were 12 months ago.

Of the 16 districts around the country the REINZ publishes median prices for, they dropped in eight compared to May (Northland, Auckland, Waikato, Gisborne, Hawkes Bay, Taranaki, Marlborough and Southland), rose in seven (Bay of Plenty, Manawatu-Whanganui, Wellington, Tasman, West Coast, Canterbury and Otago) and were unchanged in Nelson.

The median price was also down in Queenstown-Lakes, traditionally one of the hottest real estate markets in the country, where June’s median price dropped to $860,000 from $881,500 in May, putting it below the June 2016 median of $875,000.

In the Wellington Region the median price rose from $525,000 in May to $530,000 in June, but in Wellington City it dropped from $665,000 in May to $650,000 in June.

In Canterbury the median price rose by $500, from $435,000 in May to $435,500 in June, while in Christchurch it rose from $446,000 in May to $450,000 in June. (The interactive graph below shows the price trends in all regions)

Homes are also taking longer to sell, with the median number of days required to sell a home up by five days in June across the whole country compared to a year ago, and up seven days in Auckland.

And sales volumes are declining.

In Auckland the number of homes sold in June was down by a third compared to June last year and nationally sales are down by a quarter.

In Auckland 1769 homes were sold in June compared to 2212 in May and 2649 in June last year.

That was the lowest number of homes sold in Auckland in the month of June since 2010. 

“The number of properties sold across the country is the lowest we’ve seen in the month of June for three years, particularly in the $500,000 and under property price bracket,” REINZ Chief Executive Bindi Norwell said.

Westpac’s Acting Chief Economist Michael Gordon says the market slowdown that started in Auckland is spreading beyond the region.

“The latest REINZ house sales report points to a substantially softer housing market in June,” Gordon said in a Westpac First Impressions newsletter on the figures.

“While the slowdown was originally concentrated in Auckland, it is now spreading to a greater number of regions.

“Sales fell sharply in seasonally adjusted terms, that is much more than just the usual winter lull.

“The REINZ House Price Index fell by 1% in Auckland and is now slightly lower than it was a year ago.

“Notably, house prices in the rest of the country, which had been rising at a solid pace up to now, were flat in June.

“They’re still up 9% on a year ago, but the slowdown in sales across the country suggests that some further cooling in the pace of house price growth is on the way.

“We have long been warning of a cooling in the housing market this year.

“Up until now the puzzle has been that the market outside of Auckland has remained so strong, given that what we see as the main restraining factors – loan-to-value restrictions and rising interest rates – apply more or less equally nationwide,” he said.

Here is the REINZ’s full report for June: PDF iconREINZ Monthly Property Report Data – June 2017.pdf

Median price – REINZ

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